GST charge on Transaction advice ;inward remittance;conversion fee

[Shan S]

My bank is charging GST on foreign inward remittances, but these charges are not showing up under my GST number. Is this normal? Since I have a current account and already gave the bank my GST number, shouldn't they be issuing me a proper tax invoice?

[Sadanand Bulbule]

Seek proper clarification from the Bnak. It should issue a GST -compliant invoice and report it appropriately to enable ITC.

[YAGAY and SUN]

Yes, in most cases the bank should issue a GST-compliant tax invoice for charges on foreign inward remittances if it is charging GST. However, whether the GST appears in your GST portal and becomes eligible for ITC depends on how the bank reports it.

A few possibilities:

1. Bank is charging GST but not tagging your GSTIN
   • Even if you provided your GSTIN when opening the current account, the bank's system may not have mapped your GSTIN to that specific account or service.
   • In that case, GST may be charged as a B2C transaction and may not appear against your GSTIN.
2. Invoice is issued separately
   • Many banks issue monthly or quarterly GST invoices for banking services rather than for each remittance.
   • Check your internet banking portal, email, or relationship manager for GST invoices.
3. GST reported under B2C instead of B2B
   • If the bank has not reported the transaction with your GSTIN, the invoice may not appear in your GSTR-2B.
   • This can affect your ability to claim input tax credit (ITC).
4. Nature of the charge
   • The foreign inward remittance itself is not subject to GST.
   • GST is charged only on the bank's service fees (inward remittance handling charges, SWIFT charges, forex conversion charges, etc.).

What you should do

• Ask the bank for:
  • A GST tax invoice for the charges.
  • Confirmation that your GSTIN is correctly mapped to the account.
  • Confirmation that the invoice has been reported as a B2B supply under your GSTIN.
• Verify:
  • Whether the GSTIN printed on the invoice is correct.
  • Whether the invoice appears in your GSTR-2B after the relevant filing period.

Practical concern for exporters

Many exporters discover that banks charge GST on forex-related service charges but do not automatically reflect those invoices under the customer's GSTIN. This is usually an operational issue rather than a legal one. Once the bank updates the GSTIN mapping and reports the invoice correctly, the credit generally becomes available in subsequent GST returns.

[Kashish Gupta]

GST is applicable only on the bank's service fees such as inward remittance handling charges, SWIFT charges, and forex conversion charges, and not on the inward remittance amount itself. The likely reason these charges are not reflecting under your GSTIN is that your GSTIN may not be correctly mapped to that specific account or service in the bank's system, causing the transaction to be treated as a B2C supply instead of B2B. This means the invoice will not appear in your GSTR-2B, which directly affects your ability to claim Input Tax Credit. You should approach your bank and request a GST-compliant tax invoice for the charges, confirm that your GSTIN is correctly tagged to the account, and ask them to report the transaction as a B2B supply. This is generally an operational issue and once the bank updates the GSTIN mapping and reports correctly, the credit should become available in subsequent GST returns.

[Ganeshan Kalyani]

The bank is required to mention your GSTIN in their GSTR-1. So, that it will appear in your 2B and basis which you can claim ITC. Consult your bank and understand how they are furnishing your details.

[KASTURI SETHI]

Non-issuance of tax invoice is not normal. The bank has to rectify its mistake.

[Shilpi Jain]

Check with your banker why this is not appearing. Maybe the intermediate bank is charging and your bank is only a pass through!

AI Summary

GST on bank service charges for inward remittances depends on correct GSTIN mapping and B2B reporting.
GST applies only to the bank's service charges for foreign inward remittances, such as handling fees, SWIFT charges and forex conversion fees, not to the remittance amount itself. If the bank does not correctly map the customer's GSTIN, the supply may be treated as B2C and may not appear in GSTR-2B. The bank is expected to issue a GST-compliant tax invoice, link the GSTIN correctly, and report the transaction as B2B so the invoice reflects in GSTR-2B and supports input tax credit.